Disputes & International Commercial Arbitration

Disputes & International Commercial Arbitration

Disputes in international commercial transactions are common due to differences in legal systems, languages, cultures, and business practices. To resolve these disputes efficiently and effectively, parties often opt for international commercial arbitration, which offers a neutral forum outside the national courts.

Key Concepts

Disputes in International Trade
  • • Can involve issues such as breach of contract, payment disputes, delivery problems, intellectual property rights, and more.
  • • The complexity arises from cross-border elements, differing legal frameworks, and jurisdictional challenges.

International Commercial Arbitration (ICA)
  • • A private dispute resolution process where parties agree to submit their disputes to one or more arbitrators.
  • • Governed by international treaties, treaties like the New York Convention (1958), and institutional rules.

Advantages of ICA
Neutrality: Parties choose a neutral venue and arbitrators.
Flexibility: Procedures can be tailored to the parties’ needs.
Confidentiality: Proceedings are private.
Enforceability: Arbitral awards are recognized and enforceable in many countries under the New York Convention.

Arbitration Clause and Agreement
  • • An arbitration clause specifies that disputes will be resolved through arbitration.
  • • A separate arbitration agreement is a written agreement to arbitrate that is entered into after a dispute arises.

Institutional vs. Ad Hoc Arbitration
  • • Institutional Arbitration: Conducted under the rules of established institutions like ICC, LCIA, SIAC, AAA, etc.
  • • Ad Hoc Arbitration: Conducted independently by the parties without institutional rules, often under the UNCITRAL Rules.

Procedural Aspects
  • • Selection of Arbitrators
  • • Language of Arbitration
  • • Place of Arbitration (seat)
  • • Rules governing proceedings

Enforcement of Arbitrary Awards
  • • The New York Convention facilitates the recognition and enforcement of awards across signatory countries.
  • • Grounds for refusal are limited, promoting predictability.

Challenges and Limitations
  • • Possible delays and costs.
  • • Limited rights to appeal arbitral awards.
  • • Potential difficulties in enforcement in non-signatory countries.